ASEAN epicenter of stability and growth

We publish an excerpt of Indonesian President Joko Widodo's speeches during the 43rd ASEAN summit in Jakarta

An Indonesian proverb says that a neighbor is like a close relative, and a close neighbor is more important than a distant relative. I am of the view that the proverb is very, very relevant for ASEAN that 56 years ago pledged its kinship with the ASEAN family name. As a family, in my opinion, ASEAN is in the category of harmonious families, in the category of strong families, and in the category of high achiever families. ASEAN has proven itself as a peaceful region, as a stable region, and as a region that is growing in prosperity. We can see that ASEAN’s economic growth in 2024 is estimated to be the highest in the world, reaching 4.5 percent (year on year). ASEAN is also the most attractive region for Foreign Direct Investment (FDI). By 2022, 17 percent of FDI will go to ASEAN. That is the highest number compared to other developing regions. ASEAN is also enjoying a demographic bonus with the third largest workforce in the world, and 65 percent of its population has the potential to become the middle class in 2030. We must applaud this, because all of this is part of ASEAN’s capital to achieve its goal of becoming the epicenter of growth. However, amid the turbulent global situation, ASEAN should not do business as usual. ASEAN needs extraordinary strategy, the extraordinary tactical strategy. We need a more solid collaboration; we can’t do it alone. Strong cooperation between countries, businesses community and the public in the region is important in implementing the tactical strategy. We are all aware of the magnitude of the current world’s challenges, where the master key to confront them is the ASEAN’s unity and centrality. ASEAN must be able to work harder, be more unified, be braver and be more agile. Apart from that, ASEAN also needs a long-term plan that is relevant and in accordance with the expectations of the people, not only for the next five years ahead but for the next 20 years until 2045. ASEAN as part of the Indo-Pacific region also continues to consistently work hard, both using an inclusive approach through the cooperation of the ASEAN Secretariat with the Secretariat of the Pacific Island Forum (PIF) and the Indian Ocean Rim Association (IORA), as well as an economic and development approach through the ASEAN Indo-Pacific Forum (AIPF) so that ASEAN can have an impact on its people and also on the world. ASEAN as a big ship also bears a big responsibility to the hundreds of millions of people who sail together on it. And, even though we have to sail in the midst of a storm, we as ASEAN leaders must make sure that this ship is able to continue moving and to keep voyaging. And, we must be the captains of our own ships to materialize peace, stability, and shared prosperity.

The huge new channel connecting China and ASEAN

Launched last year, the project highlights Beijing's shifting focus toward improving maritime connectivity. 

The Pinglu Canal will stretch over 134 kilometers from the Xijin Reservoir near Guangxi's capital Nanning to the port of Qinzhou in the south, complementing existing highways and railways for moving goods. The huge $10.3 billion canal will have locks capable of accommodating 5,000-ton merchant ships. This would demonstrate--according to observers--Beijing's shifting focus toward improving maritime connectivity for its Belt and Road Initiative, at the expense of land routes. Officials say the canal will reduce the navigation distance between inland river networks and the sea by 560 kilometers, compared to passing through Guangzhou, resulting in savings of up to 5.2 billion yuan per year.

By creating convenient and cheap access near Southeast Asia, the Pinglu Canal also promises to boost industries in Guangxi and other parts of relatively less developed western China. In addition, geopolitical dynamics could make the project's implementation even more urgent.

As emerged at the mid-May Group of Seven summit in Hiroshima, just as the United States and Western allies are determined to "reduce risks" from China, Beijing also aims to reduce its trade dependencies. In a report published in March by the Peterson Institute for International Economics, analysts said that "both sides have the same fear, that the other will suddenly use trade flows as a weapon -- cutting imports or exports -- in the name of security."

The channel aims to strengthen already growing trade with ASEAN states, which are all joined with China under the Regional Comprehensive Economic Partnership (RCEP) free trade framework, officials said. ASEAN and China have now become each other's largest trading partners, with two-way trade increasing 52 percent from 2019 to 2022, surpassing the 20 percent increase with the European Union.

In addition to reducing China's dependence on trade with the West, some say that stepping up business with Southeast Asia could also ease disagreements between Beijing and various governments in the region. According to Phar Kim Beng, CEO of the Malaysian consultancy Strategic Pan Indo-Pacific Arena (SPIPA), China and some ASEAN countries need such cooperation to mitigate the bitterness of their territorial disagreements in the Spratly and Paracel Islands in the South China Sea.

As noted by Yang of the Danish Institute, lessons from the pandemic have further pushed authorities to strengthen transportation infrastructure. COVID-19 restrictions in China caused severe supply chain disruptions as logistics were concentrated at key ports on the country's east coast. In his view, as a result of China's difficulties in handling global logistics during COVID, it is therefore necessary to strengthen some ports in China so that it does not rely on the larger Shanghai ports.

In fact, the canal is just one part of a much larger effort to create an efficient land-sea corridor. Guangxi government officials say the emerging corridor has already accelerated logistics, shortening the duration of shipments from Chongqing-in western China-to Singapore from twenty-two to seven days. However, even with such improvements, some experts warn that the full economic benefits of the canal and high-tech port infrastructure will not be automatically resolved.

According to Stephen Olson-researcher at the Hinrich Foundation in Singapore-there may be limits to the growth of trade with the Southeast Asian bloc, as "building efficient infrastructure alone cannot create trade synergies where they do not exist, nor can it create competitive industries in ASEAN that are capable of producing what Chinese importers will demand. The Chinese economy is much larger than any single economy in ASEAN, and this creates leverage that can sometimes lead to unbalanced and unsustainable trade relationships." Olson also expressed skepticism about efforts by both the United States and China to bring ASEAN countries closer to their side. "For most ASEAN countries, their national interests are protected by sitting on the fence and maintaining strong economic and strategic ties with both," he said.

Another area of concern is the environmental and financial costs. A study published in 2022 by the Transport Planning and Research Institute, under China's Ministry of Transport, reported a number of potential side effects of the canal, including isolation or destruction of natural habitats, changes in the ecology of the area, reduction of vegetation, and dust or other pollution caused by passing ships. However, the authors argued that, depending on the route, the risks should be "controllable," while noting that "abundant wetland environments" could be created to mitigate impacts. Project officials also promised to build conservation havens to safeguard the ecology.

The estimated $10.3 billion bill for the canal project comes as Chinese local governments' fiscal health comes under greater scrutiny, now that pandemic-related social restrictions have been lifted, and the real estate sector is experiencing a severe slowdown. 

According to business data research portal, the canal project is supported by state institutions in Guangxi, including the Guangxi Beibu Gulf Investment Group. The group in December was assigned a Baa3 rating in its first assessment by Moody's. The rating was supported by the Guangxi government, although the agency noted the group's "rapid debt growth related to its investments in public policy projects."

Separately, both foreign and local manufacturers in Qinzhou say they are beginning to feel both the effects of the new port facilities and the consequences of the RCEP. The trade agreement, also signed by Japan, South Korea, Australia and New Zealand, which went into effect last year, eliminates 90 percent of tariffs on goods traded between signatories. "Tax clearance has been reduced from three days to only one to two minutes," said Zhou Ju, an official of Asia Pulp and Paper in Qinzhou, backed by Indonesian conglomerate Sinar Mas Group. According to Zhou, this is due to the certificate of origin, as export documentation is available online under RCEP.

Officials insist that the Pinglu channel will allow China to make even greater gains from the RCEP. 

How the ASEAN summit went

The 43rd summit of the Association of Southeast Asian Nations took place in Jakarta, Indonesia. Several agreements were signed inside and outside the group

Editorial by Lorenzo Lamperti

Still united despite differences. Joko Widodo, President of Indonesia and host of the 43rd ASEAN summit, called the bloc of Southeast Asian countries this. A bloc not in the geopolitical sense of the term, since ASEAN more than any other promotes a third way made up of not competition but, if anything, cooperation. Inside and outside the Association, as shown by the results achieved during the summit held in recent days in Jakarta. At least 93 projects, with a total value of $38.2 billion, were identified at the ASEAN Indo-Pacific Forum, a platform for the bloc's members to mobilize public and private financing and promote deeper economic cooperation. They included industrial, infrastructure and energy transition plans. Another 73 potential opportunities worth $17.8 billion were also discussed. Adopted statements on gender equality, sustainability, agricultural cooperation, food security and climate change. In addition, during the ASEAN +3 meeting, which in addition to the Southeastern countries also includes China, Japan, and South Korea, it was agreed to work together to develop an electric vehicle ecosystem. A crucial issue for economic and technological development in the near future, with an eye on sustainability. And, above all, an area in which Southeast Asia looks set to play a leading role. That's not all. With Beijing, in the presence of Premier Li Qiang, a joint ASEAN-China statement on mutually beneficial cooperation in the Indo-Pacific was issued. With Beijing, the renewal of the free trade agreement by 2024 and major new investments on the strategic microchip sector are also discussed. Interesting results on the bilateral level as well. The Philippines signed a free trade agreement with South Korea, while Indonesia asked the United States to start talks on a trade agreement on mineral resources. On the diplomatic front, Australia has announced that it will host ASEAN leaders in Melbourne next March for a special summit to mark 50 years of relations. In the background, but not overly so, the Myanmar crisis remains unresolved, on which the 2021 5-point consensus review has been prepared. Tensions over the South China Sea also remain, partly because of the competition between China and the United States. Competition in which, as Widodo reiterated in his closing remarks, ASEAN plays a role as a "theater of peace and inclusion."

Southeast Asia beacon of growth

The region is benefiting from a restructuring of global supply chains as it sits at the intersection of two of the world's largest free trade agreements

By Tommaso Magrini

A year and a half after the start of a historic interest rate hike cycle, Southeast Asia's economic outlook continues to stand out in a world of high inflation and weak demand. This is highlighted in an editorial published in Nikkei Asia, which points out that HSBC expects the six largest economies in Southeast Asia -- Indonesia, Thailand, Malaysia, the Philippines, Singapore and Vietnam -- to grow by 4.2 percent this year and 4.8 percent next year. This pace would far exceed the 1.1 percent expansion projected for the developed world in 2022 or the 0.7 percent estimated for next year. This acceleration is all the more remarkable considering that Chinese tourism dollar inflows have not returned to Southeast Asia as expected. A recovery in tourism would certainly be a boon for Southeast Asia. But in the meantime, trade, energy transition and digital transformation are set to fuel the region's economic growth for decades to come and ensure that this dynamic region remains a global growth engine. Southeast Asia has come a long way as a manufacturing hub. It now accounts for 8 percent of global exports and has overtaken the European Union as China's largest trading partner since 2020. The region is benefiting from a restructuring of global supply chains as it sits at the intersection of two of the world's largest free trade agreements, the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership. The RCEP in particular, with its business-friendly tariff reductions and rules of origin, is increasing Southeast Asia's attractiveness as a manufacturing base, a fact that more and more companies are recognizing. According to a recent HSBC survey, Asia-Pacific companies plan to base 24.4 percent of their supply chains in Southeast Asia in the next one to two years, up from 21.4 percent in 2020.

What to expect from the ASEAN summit

From 5 to 7 September the 43rd summit of the South-East Asian countries will take place in Jakarta, Indonesia. Objective: to prepare the bloc for the challenges of the next 20 years.

The Chairmanship now handled by ASEAN, Indonesia, declared it had invited 27 global leaders and executive directors of international bodies to the 43rd ASEAN Summit in Jakarta, scheduled from 5 to 7 September. The three day-meetings will bring together not only the leaders of the ASEAN member States, but also external partners of the bloc. Also global financial institutions such as the World Bank and the International Monetary Fund (IMF) are invited to the dialogue. “We expect the participation of leaders from 27 countries and international organizations at the imminent summit. The Canadian Prime Minister [Justin Trudeau] is expected to attend the summit”, declared the General Director for ASEAN Cooperation at the Ministry Affair Sidharto Suryodipuro. Discussion on strengthening the capacity and the institutional effectiveness of the bloc in order to help the organization in meeting the challenges of the next 20 years will continue at the summit.Suryodipuro declares that Indonesia intends to lay the foundations of ASEAN cooperation to address the present and future challenges. The 43rd ASEAN summit will also see the handover of the regional group to Laos, which will lead the bloc through 2024. In parallel, President Joko “Jokowi” Widodo will lead 12 meetings during the three-day forum, including the 18th East Asia summit. In addition to the group’s talk with dialogue partners, including the United States and India. Among others, the Canadian Prime Minister Justin Trudeau and the Indian one Narendra Modi are expected to attend, despite the fact that a few days later he will host the G20 summit in New Delhi. India and ASEAN have also recently reported their will to upgrade their free trade agreement by 2025. Instead, it seems that Joe Biden, who has chosen to travel only between India and Vietnam during his Asian trip in September, will be absent. This decision will note please the Indonesian host. Jakarta is now seeking to enjoy the Organization for Economic Cooperation and Development (OECD). If the plan succeeds, Indonesia will become the third Asian country to join the organization, after South Korea and Japan.

Five countries inaugurate ASEAN network for QR Code payments

Malaysia, Indonesia, Thailand, Singapore and the Philippines have interconnected their national QR code payment platforms. Consumers will be able to instantly make payments, including in foreign currency, with reduced costs for both them and sellers. The region solidifies its position as a global fintech hub.

Last June, Malaysia and Indonesia connected their digital payment platforms based on QR code technology. Kuala Lumpur had already completed the connection with Singapore in April and, even earlier, with Thailand. These initiatives are not isolated or bilateral but are part of a coordinated ASEAN project that also involves the Philippines. Five prominent economies in the region have decided to coordinate the technical standards of their respective national platforms, creating a network that allows users to make payments using their national provider's QR codes issued in another country. The project also enables instant currency conversion. The initiative was announced last year during the G20 summit of finance ministers and central bank governors, chaired by Indonesia. The five partners intend to continue the project, and in the future, consumers may also be able to make instant transfers or purchase national digital currencies through platform interconnections. Other countries may also join the network.

The ASEAN initiative is part of a global context of rapid QR code development, increasingly used for digital payments. By 2025, this payment method could move $3 trillion globally. Its main strength lies in its accessibility, as in certain regions of the world, owning a smartphone is much easier than having a credit card. This condition could enable Southeast Asia to drive “a digital payment revolution". Over 50% of ASEAN consumers living in urban areas already use e-wallets for their payments, and this number is expected to reach 84% by 2025. The figures are not equally impressive in rural areas, where less than 20% of consumers used e-wallets in 2020, but this number is projected to approach 60% by 2025. This trend aligns with what is happening in China with Alipay and WeChat. The main barrier to this conversion is the scepticism of merchants who consider the transactions to be unreliable and too costly, leading them to reject electronic methods. However, the adoption of QR codes and their ASEAN-level interconnection provides a response to these concerns and will undoubtedly contribute to the spread of digital wallets. QR code advocates also claim that the method is safer, as it requires less personal data to be provided to sellers.

This "revolution" will have an impact on the future development of many sectors of the economy, creating winners and losers. Traditional banks, already less present in certain areas of ASEAN countries, risk being replaced by fintech competitors. To pay with a credit card or withdraw cash from an ATM, a current account and a physical distribution network are required. These are not easy obstacles for traditional banks to overcome due to costs and difficulties in obtaining creditworthiness information about potential customers. Fintech companies, on the other hand, are not burdened by these requirements and can more easily attract new customers in Southeast Asia and extract value from their transaction data. It is a market with immense potential, and "unlocking" it will allow ASEAN companies to further grow and consolidate the region's position as a global laboratory for digital and fintech innovation.

However, these initiatives also have a political dimension. QR codes reduce the costs of individual transactions and, as mentioned earlier, are easily accessible even to individuals normally excluded from traditional banking channels. The so-called "financial inclusivity," which aims to make the financial system accessible to the middle class and those living in rural areas, is a strategic objective for ASEAN governments and can make their economies more prosperous and competitive. Moreover, the fact that the coordination of technical standards occurred at the ASEAN level, rather than just bilaterally, is evidence of the organization's potential as a forum to discuss and strengthen regional integration, both economically and digitally. However, this project is limited to some of the most competitive and closely aligned economies within the organization. Which other national platforms could join in the future? Vietnam has already worked with Thailand to connect their QR payment systems, and if it participates in the network with the other four countries, all the wealthiest economies in the region would be part of it. Involving smaller countries with fewer resources is more challenging.

The political impact of this initiative goes beyond ASEAN. The coordination of QR platforms allows consumers to instantly pay bills in foreign currency with minimal exchange rates. In practice, the system converts ASEAN currencies directly, without the need for US dollar intermediation. The digitalization of money flows thus poses an additional challenge to the centrality of the American currency in international exchanges. Lastly, strengthening ASEAN as an innovative and dynamic digital hub enhances the region's role in defining future technological standards. Perhaps even capable of carving out a space amidst the US-China duopoly. Coordinating and facilitating electronic payments creates new opportunities. It is curious to observe that, on the other hand, in Italy and other European countries, it is sometimes still challenging to pay with a credit card, and preserving the role of cash is a political issue. This approach is completely opposite to the dynamism demonstrated by Asian companies and governments, slowing down the progress of our economies towards the new digital "revolution."

EU-ASEAN, towards new forms of cooperation?

We publish here an excerpt from the introduction of the Carnegie Endowment for International Peace report : “Rethinking EU-ASEAN Relations: Challenges and Opportunities”.

The European Union (EU) and the Association of Southeast Asian Nations (ASEAN) formally marked almost half a century of diplomatic ties at the end of 2022. The summit commemorating the forty-five years of the two blocs was held in Brussels. Paradoxically, despite escalating tensions over the security sphere in both regions, the security dossier has not been central to the EU-ASEAN agenda. This is symptomatic not only of the way the two organisations view each other's capabilities and interests in each region, but also of the way the relationship has gone so far. There have been a series of ups and downs, with many of the more contentious issues - particularly the thorny ones relating to democracy and human rights - left to diplomats or addressed by civil society, given the sensitivity at the political level. The main focus of EU-ASEAN relations has been on trade and investment, reflecting the EU's competence vis-à-vis its member states and areas where ASEAN as a whole has slightly more room for manoeuvre. Despite the inability to push forward a free trade agreement (FTA) between the EU and ASEAN, which has stalled since 2007, the EU has made progress with bilateral FTAs with individual ASEAN member states, including Singapore and Vietnam. On the foreign policy front, both the EU and ASEAN face difficulties. EU members have never made progress in ceding full control of external engagement to the EU's executive arm. Despite the ratification of the Lisbon Treaty in 2009, EU member states have continued to retain national competence over the many challenges affecting the Union's Common Foreign and Security Policy. ASEAN acts in much the same way, but much more strongly favours the prerogatives of individual member states. And there has never been any ambition or coordinated attempt to outsource ASEAN's foreign policy efforts to the regional secretariat. However, over the past decade or so, the geopolitical landscapes in Europe and Asia have changed significantly, leaving the EU and ASEAN exposed to critical economic and security vulnerabilities over which they have limited control. This is why the EU and ASEAN can work together and create a space that is based on their cooperation. The EU and ASEAN have a mutual need for each other's presence in international affairs and a relationship based on genuine cooperation and delivery of concrete results.

The future of ASEAN's youth

The economic growth of Southeast Asian countries will depend largely on the ability of governments to value their young people 

Southeast Asia is one of the most dynamic and fastest growing regions in the world from a labor market perspective. With a total of about 700 million people, the region has a young, dynamic and increasingly educated population. From 1950 to 2020, the Southeast's working-age population grew from 95 million to 453 million. As the working-age population has grown faster than the non-working-age population, the economy's dependency ratio, i.e., the ratio of people considered "non-self-employed" due to age to people who are able to work, has declined leading to a phase of economic growth.

Unfortunately, however, this demographically favorable condition is not likely to last much longer. In Thailand, for example, it is estimated that as early as 2050 the number of people in the 20-64 age group will be 21 percent lower than in 2020. Moreover, if at the moment the average age in ASEAN countries turns out to be 30 in 2050 it will rise to 37.3 years showing that Southeast Asian countries will also move toward a phase characterized by a gradual aging of the population in which economic growth will depend more on the productivity and skill level of young people. As stated by Martijn Schouten, "workforce transformation leader" in Singapore for PWC, the need for a process process of skill adjustment and enrichment to create a workforce with digital and green skills has never been more urgent, considering the commitment made by many ASEAN countries to transition to a zero-emission economy. This transition will add roughly 30 million new jobs in Southeast Asia by 2030. 

Therefore, it is critical that governments in the Southeast Asian region invest in the education and training of young people in order to increase productivity and innovation, fostering dynamic and competitive economic growth. An analysis conducted by PWC shows that extensive investment "in upskilling" would also have the potential to increase the region's GDP by 4 percent, thereby unlocking up to 676,000 new jobs by 2030. In terms of employment, the greatest benefits would be in Indonesia, Vietnam and the Philippines. 

Taking note of the situation, many Southeast Asian countries are acting accordingly. For example, in Malaysia, where the under-35s make up about 60 percent of the population, the government has allocated 2.1 billion ringgit of funds in order to empower young people to become productive, innovative and socially responsible citizens; these include an allocation of 500 million for the National Digital Skills Program, aimed at helping young people upgrade their digital skills. There is also an allocation of 150 million euros for the Youth Entrepreneurship Program, aimed at supporting young entrepreneurs and their start-up initiatives. In contrast, the Singapore government has allocated $400 million in grants from the Financial Sector Development Fund (FSDF) through 2025 to support skills training for professionals in the financial sector. Thailand's Ministry of Labor has partnered with Microsoft Thailand to provide digital skills to 4 million people to support key sectors, including manufacturing, creating new jobs and business opportunities. The first phase of the partnership has boosted the digital skills of 280,000 Thai employees from 2020 to 2022, but a plan to create an additional 180,000 job opportunities is already in place.

Ambassador Alessandro bids farewell to Vietnam

The Italian diplomat prepares to leave Hanoi. His farewell meetings as told by Vietnamese media

In Vietnam since November 2018, Italian Ambassador Antonio Alessandro paid two important farewell visits last week. Specifically to the Chairman of the Hanoi People's Committee, Tran Sy Thanh, and the Minister of Foreign Affairs, Bui Thanh Son. "Over the years, people-to-people exchanges have fostered mutual trust and understanding between Vietnam and Italy in general, and between Hanoi and Rome in particular, paving the way for extensive cooperation in the economic, trade and investment fields," said Tran Sy Thanh. As told by the Hanoi Times, he then expressed gratitude to the ambassador for his valuable insights and acknowledged his contribution to the overall development of bilateral relations between the two nations. With a commitment to promoting cooperation, Tran Sy Thanh assured that the local government will continue to facilitate the activities of the Italian Embassy in Hanoi by creating favorable conditions. The Vietnamese media reports that "during the meeting, Ambassador Antonio Alessandro expressed his deep gratitude and sense of belonging after serving in Vietnam for more than four years, saying he feels like a citizen of Hanoi." Alessandro went on to say that the Italian Embassy has received excellent support and cooperation from the Hanoi People's Committee, which has led to remarkable achievements in the various fields of cooperation between Vietnam and Italy, ranging from culture and society to economy, trade and tourism. Bilateral trade between Vietnam and Italy has seen positive growth, with Italian companies participating more and more actively in the Southeast Asian country's market. The Ambassador then anticipated new progress in relations between Vietnam, Hanoi and several Italian localities. Initiatives such as the Memorandum of Understanding on cooperation between Rome and Hanoi and Rome's bid to host EXPO 2030 offer promising prospects for greater cooperation. All this while just this year marks the 50th anniversary of the establishment of official diplomatic relations. Concluding his speech, the Hanoi Times reports, "Alexander said that although his term is now over, his affection and bond with Hanoi and Vietnam will last indefinitely." 

Barbie & co.'s problems with maps in Vietnam

Depicting the South China Sea is a tricky thing, given the territorial disputes between some ASEAN countries and China. And it sometimes happens that movies or bands have problems 

It may be a "childish doodle," as Warner Bros. called it, but enough is enough. The map that appears behind Barbie's back in a scene in the trailer was enough to have the film removed from Vietnamese theaters. And it is not even nine features, but eight. Their location next to a parallelepiped sketched with the words "Asia" conveys an unmistakable image: that is the "nine-dash line," the demarcation line of those territories in the South China Sea that China claims as its own. 

First the posters disappeared from theaters, then on Monday, June 26, came the final news: Greta Gerwig's film will not be released "because of some scenes depicting the nine-dash line map, which is considered a violation of Vietnam's territorial sovereignty." Word from the National Council for the Evaluation and Classification of Films. Social media also favored the government perspective: regretful but infuriated with the producers, Vietnamese netizens were equally offended by the pro-China map.

Manila also considered the option of outright censorship. "The map legitimizes Chinese claims, which no government in the world supports" and is "offensive to all" countries in the region, argues military analyst Jose Antonio Custodio. These are smaller markets, but not so indifferent, explains Hollywood Reporter: a Hollywood cult in the Philippines and Vietnam can add between five and ten million dollars to Warner Bros. budget. Quite a risk if national pride starts infecting neighboring countries. The Asian archipelago, moreover, spearheaded the 2016 petition to the international tribunal in The Hague denouncing Chinese incursions and demanding compliance with the United Nations Convention on the Law of the Sea (UNCLOS).

Pop nationalism

The same "oversight" in 2019 cost Vietnamese film distributor CJ CGV as much as $170 in fines: it had marketed The Little Yeti, a DreamWorks-signed cartoon that ended up in the crosshairs of the Philippines, Vietnam, and Malaysia for the same reason. 2019, after all, has been one of the most tense years in the South China Sea, caused by the operations of the Chinese vessel Haiyang Dizhi 8 around the Spratly Islands.

La stessa “svista” nel 2019 è costata ben 170 dollari di multa al distributore di film vietnamita CJ CGV: aveva commercializzato Il piccolo Yeti, un cartone animato firmato DreamWorks finito nel mirino di Filippine, Vietnam e Malesia per la stessa ragione. Il 2019, d’altronde, è stato uno degli anni di maggiore tensione nel Mar cinese meridionale, causata dalle operazioni del vascello cinese Haiyang Dizhi 8 nei dintorni delle isole Spratly. 

The nine-dash line, which takes up about 90 percent of the three million square kilometers of water that bathes mainland Southeast Asia, has infuriated the Philippine government with Netflix over its appearance in some scenes of the Australian series Pine Gap. So much so that the streaming giant proceeded with their removal from the platform.

On the other hand, critics say, there would be an ongoing process of self-censorship and condescension toward China by the cultural industry giants. Between multimillion-dollar investments in U.S. production companies coming in from the PRC and the obvious preponderance of the Chinese market - the second largest in the world - here even Hollywood would be prone to the subtleties of Chinese soft power.

In 2016, a bipartisan group of sixteen members of Congress had taken it upon themselves to expose Chinese business around the U.S. entertainment industry, gaining the consensus of the Committee on Foreign Investment in the United States (CFIUS). In ASEAN countries, at least those most aggressive against Chinese incursions into claimed areas, the process is less complicated: the government takes care of it directly.

Not just cinema

The rhetorical battle is not limited to the cinematic sphere. Initially denounced on social media, the controversial graphics on the website of the organizers of the Vietnamese leg of the k-pop group Blackpink generated the same boycott threats. The company, iMe Entertainment Group Asia, soon responded to the Culture Ministry's demands by promising to remove the tour map. It explained in a statement, "The map does not specifically represent the territory of any country, we are aware of and respect the sovereignty and culture of each country."

Hanoi also did not relent when it came to validating entry visas into the country on new Chinese passports. In 2012, these passports clearly showed the map that since 1949 would justify the historical belonging of the South China Sea territories to China. And Vietnam then asked to issue separate documents instead of stamping the dedicated pages.

In countries such as Vietnam, culture is one of the outlets granted by the Party. This was the case with the wave of demonstrations in 2011 and 2014 that brought masses of angry citizens to the streets of major Vietnamese cities, all in protest of Chinese manoeuvres in the claimed areas of Hoàng Sa (Paracelsus Islands) and Trường Sa (Spratly Islands). 

Bringing down the language of nationalism to the culture industry could allow this too. What better than a global cinematic success to ignite the flame of public participation where few-if any-are the venues for dissent? A process that occurs, by contrast, in China, where geographic definitions on a T-shirt can trigger a brand ban.

Philosopher Alfred Korzybski argued that "the map is not the territory," but an ideological construct. For Asian countries bordering the South China Sea, the map is something more: an always necessary history, and never a "doodle."

The depths of diplomacy

Among the most coveted projects is the Southeast Asia-Middle East-Western Europe 6, or SeaMeWe-6, which connects France to Singapore, touching a dozen other countries. A project at the center of competition between the United States and China, it will place Singapore even more at the heart of world diplomacy

By Chiara Suprani

Among the means that countries take to direct their "economic diplomacy," there is one less popular than semiconductors, but just as central: it lies underwater, connecting continents with "only" the power of a cable. These are undersea telecommunications cable networks, which have become critical infrastructure over the years for digital economy, international data traffic but also for logistics. Italy, too, is planning its own submarine cable: it is called Unitirreno, and it connects Genoa to Mazara Del Vallo, providing access to a "carrier-neutral" data center that does not belong to any telecommunications company. Submarine cables make connections faster, dilute data traffic, enable better telecommunications and digital phases of countless economic sectors. And a cable is as much a part of the network as it is a node.

Among those nodes is Singapore, which has 25 operational submarine cables under its belt, making it the largest underwater Ethernet hub in the region. And in addition to the already planned 14 future projects, the city-state will double the number of cable attachment points in the coming years through billions of dollars of investments.

Companies such as Meta, Google along with countries such as the Quads, which are Australia, Japan, India and the United States have set their eyes on Singapore. The companies are investing in projects called Echo and Bifrost, both of which will be finished next year and Echo will connect Singapore to the United States for the first time, directly; the Quads have signed a new agreement to increase undersea Ethernet cables in the Indo-Pacific.

And as critical infrastructure, their fragility has not gone unnoticed either. Submarine ethernet cables have often been the subjects and victims of diplomatic disputes between countries: for Wired, the global network of undersea cables makes up most of the skeleton of the internet nowadays, irreplaceable even by Elon Musk's famous Starlink project. As the number of undersea cables has increased, hubs became at the same time "choke points" or breaking points, as in the case of Egypt from which 17 percent of all the world's internet traffic passes. Similar could be the fate of Singapore, which will have to ensure uninterrupted data traffic and be a reliable resource. The city-state will have to develop a disaster mitigation response plan, disaster such as those that affected the Solomon Islands in 2018, the Federated States of Micronesia in 2021 and the Matsu Islands in February this year. Among the most coveted projects is the Southeast Asia-Middle East-Western Europe 6, or SeaMeWe-6, which connects France to Singapore, touching a dozen other countries. A project at the center of competition between the United States and China, it will place Singapore even more at the heart of world diplomacy.

ASEAN will lead the next decade of global trade

Southeast Asia is set to become a major growth center in the coming years. This is supported by a new report from Standard Chartered Bank

"Global trade is increasingly shifting toward Asia as high-growth corridors emerge within the region and to new markets in Africa and the Middle East. The bloc of Southeast Asian countries that are part of ASEAN is obviously at the top of the list, with trade among the bloc's member states set to accelerate to nearly 9 percent annually over the next decade." Michael Spiegel, global head of Transaction Banking at Standard Chartered Bank, strongly argues this in a commentary published in the Business Times. "While these trends signal great opportunities, businesses are also facing a polycrisis, or a set of interdependent challenges, from rising geopolitical tensions, inflation and energy prices to the increasingly urgent need to address climate risks," Spiegel writes. According to the Standard Chartered Bank expert, "to succeed, companies must act now, connecting to new markets to diversify both sourcing and production to achieve more resilient supply chains. Sustainability is increasingly an imperative for both investors and consumers, making environmental, social and governance (ESG) compliance more urgent than ever, not only for corporations but also for their suppliers." Spiegel argues that "companies must balance growth objectives with resilient and sustainable supply chains. They need to identify and connect to growth opportunities, then execute a sustainable and resilient growth plan." The Standard Chartered Bank expert concludes by asking a precise question to which he proposes an equally precise answer: "So where will the growth hubs of the future be? We believe they will be in Asia, Africa and the Middle East, which are set to propel global exports from $21 trillion to $32.6 trillion by 2030, according to our new Standard Chartered Bank Future of Trade report."